The Replacement Game: Ethics vs. Profit

by Kevin V. O’Neill

At most business seminars, we learn new advertising and sales techniques to get our customers to part with their money. However, I rarely hear speakers promoting business ethics or how to fix things properly so that they actually last longer.

When I started in this business, I worked for my father and grandfather. I learned by cleaning fittings, taking inventory and sweeping floors. In short, I started at the bottom.

One thing Grandpa always said was that there never seemed to be time to do it right, but there was always time to do it over.

The interesting thing was that when other contractors were slow, we would still be busy because we had a lot of private work that didn’t go out for bid. This was because we did such a good job for these customers that they wouldn’t ask anyone else to bid their work.

They knew that though we cost more than other contractors, our work was much better and the equipment we put in would give them fewer problems and cost them less in the long run.

Today, I often talk to contractors who believe if a unit more than five years old has a major failure, the entire unit or system should be replaced. This includes top quality and high-efficiency equipment made by major, quality manufacturers.

Now, if the equipment is installed in an ocean front location, it may be corroded enough within five years to warrant replacement. In most cases, however, a five-year-old unit should be repaired.

Nevertheless, there’s a pervasive belief in our industry that making the replacement sale immediately is the answer to all our problems. Well, I have picked up a number of customers lately who have tired of that theory.

One customer, who had a builder- grade unit, had a service agreement with another contractor.

On the first two visits, the customer was told that everything was fine. During the last visit, the technician told the customer that the indoor coil and drain pan were very rusty and a complete equipment failure was imminent

When the customer asked me to look at the system, I found the coil in good condition and the “very rusty” drain pan was made of plastic. In addition, the drain line was clogged, and it was apparent that no algaecide had been added to the drain pan in a long time.

Although the customer had renewed the service agreement, he called the other company and told them not to come back, even though he had another visit due. Despite the customer’s extreme dissatisfaction, the other contractor would not refund his money.

My new customer then told all of his neighbors how he was treated by the other contractor. As a result, that contractor won’t be getting any more work in that neighborhood.

Once I was in a novelty store where I saw a sign that read:

Here at Acme Yachts, we make good boats:
At a profit if we can;
At a loss if we must;
But, always good boats!

In the new business ethics, the sign would read:

Here at Acme Yachts, we make boats at a profit!
Good boats if we can;
Bad boats if we must;
But always at a profit!

I agree that we must make a profit. However, if a job’s cost exceeds what we figured, we should still deliver the quality we promised our customer.

By taking proper care of my customers, treating them fairly and being honest, I am able to continue growing my business.

Pushy marketing and sales techniques, along with lying to service customers can cost you customers. We need to improve our business ethics before either the government steps in and regulates our industry, or worse, all of our customers go to someone else.

Kevin V. O’Neill, CM, is the co-owner of O’Neill-Bagwell Cooling & Heating, Myrtle Beach, SC. He has 27 years of experience in the HVAC service business and is a 20-year member of RSES. Kevin can be reached at 843/385-2220.

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